With enactment of the 2009-10 New York State budget, “New York will leapfrog New Jersey to claim the mantle of America’s worst tax code for business.” So says Josh Barro on the Tax Foundation’s always informative Tax Policy Blog.
This plan isn’t as terrible as the Full Schneiderman, but it’s still quite bad. Usually, New York politicians defend high taxes by saying that New York City is so wonderful, people will stay at any price. But at a time when (former) investment bankers have become more price-sensitive and more mobile, this plan gives them a push to take their next business ventures elsewhere.
This tax increase would be less annoying if it were truly necessary to produce a balanced budget. However, as the New York Times noted in a news analysis piece yesterday, the budget’s 8.7% spending increase “could hardly be called austere.” Symbolizing New York leaders’ lack of spending restraint, the budget even includes $170 million for “members’ items,” the New York State version of federal earmarks.
The Empire Center has detailed those pork-barrel expenditures here.
If there is a silver lining here for non-curling New Yorkers, it’s that New Jersey is working on a terrible tax and budget plan of its own. New Jersey may re-leapfrog New York and retain its honors for worst tax code in the country. Usually, here at the Tax Foundation, we say we like tax competition between the states, but this is not really what we had in mind.